CROYDON IN CRISIS: A report from commissioners overseeing another local authority that went bankrupt offers troubling parallels closer to home.
STEVEN DOWNES reports
That’s according to Tony McArdle, the government-appointed chair of the council’s improvement board.
McArdle was interviewed by the Local Government Chronicle about his role in the winding up of Northamptonshire County Council, the Conservative-controlled local authority that went bust in 2018 – two years before Croydon’s financial collapse, and without the excuse of covid-19.
McArdle has been working as a co-commissioner in Northants for the past three years, overseeing the breaking up of the council into new bodies, and this week he delivered his final report to government. McArdle’s findings on the multi-million-pound errors and poor judgement shown in the Midlands have uncanny parallels to many of the situations he has encountered since being called in to deal with the troubled south London council.
So far, Croydon has been granted £120million from the Ministry of Housing, Communities and Local Government – the biggest bail-out ever to a local authority in Britain. The total is made up of £70million used in the last financial year to balance the covid-hit budget, and £50million to see the council through the 2021-2022 financial year.
When Katherine Kerswell, the council’s chief exec, and council leader Hamida Ali presented their begging bowl to MHCLG late last year, they also asked for £25million for 2022-2023, with a final £5million for 2023-2024.
“We were told ‘Yes’ to the £70million and £50million,” a senior Town Hall source told Inside Croydon today, “but then told that the remaining £25million and £5million sat outside the comprehensive spending review period so we would have to wait for a decision after the review.”
According to McArdle, Croydon “cannot become a full functioning local authority again without more government support”, the Local Government Chronicle reports.
“But then they should be able to recover within that funding package,” McArdle said.
The magazine report continues: “There are clearly similarities between how Northamptonshire and Croydon both came to find themselves facing a financial abyss, and while both authorities were ultimately guilty of their own undoing, austerity – made worse in Croydon’s case by coronavirus-induced financial woes – also played a role.”
McArdle refers to a lack of “self-awareness” that he found while poring over Northamptonshire’s books and encountered again when dealing with the shambles at Fisher’s Folly.
According to McArdle, Croydon Council had been “unaware that what they were doing was leading to their collapse”.
He said, “They have learnt that [self-awareness] and for officers to challenge one another.
“Putting it right will be a considerable task.”
Northamptonshire was the first local authority in England in 20 years to issue a Section 114 notice, an admission that it was unable to deliver a balanced budget. This saw the government step in to take control of the authority ut of the hands of elected councillors and the council’s officials, appointing McArdle and Brian Roberts as commissioners.
Yesterday, what is probably McArdle and Roberts’ final public report on Northamptonshire was published by MHCLG.
The LGC describes the report as “a no holds-barred exposé of what went wrong”.
McArdle said, “We felt it entirely reasonable that taxpayers should be informed as to how the council had got itself into this situation and the sector as a whole advised as to how such a failure could be avoided in the future.”
It is suggested that the commissioners felt such a report was necessary because Northamptonshire’s auditors opted not to issue a Report In The Public Interest. In Croydon, Grant Thornton, the council’s external auditors, issued a RIPI last October, a significant step in bringing about the resignation of council leader Tony Newman and his cabinet member for finance, Simon Hall.
Since then, however, further reports into the council’s financial collapse, the gross mismanagement of the multi-million-pound refurbishment of the Fairfield Halls and other documents relating to the Brick by Brick money pit have been withheld by Kerswell and council officials.
And according to McArdle, just as in Croydon, much of Northamptonshire’s problems stemmed from an inadequate rating from Ofsted on their children’s services department. In Northants, that Ofsted report came in 2013. Croydon’s children’s services were rated inadequate in 2017.
By throwing cash at their failed children’s services department, when there was no “effective plan in place to use this funding wisely”, other services in Northants were “starved of resources” to the point when they “almost ceased to exist”.
“This led to an ever-worsening, inefficient position within children’s services while also leaving other services unable to properly fulfil core functions,” McArdle says in his report. In Northamptonshire, the role of children’s services was passed to an independent trust last year.
There will be other elements of the Northants experience that are all-too-familiar to those who have observed events in and around Fisher’s Folly.
There was the “preocccupation with far-fetched experiments and ill-thought-through exotic solutions”.
The commissioners’ recommendations include that councils should not be “led by trend or fashion”, and that they should ensure that “robust and equitable” contracts are in place with service partners. Northamptonshire’s over-reliance on outsourcing its services is heavily criticised, with that council being described as “dangerously under-governed”.
Poor value PFI contracts are also highlighted. “Millions of pounds of public money have been wasted because of the poor construction of the contract and the council’s inability to hold the contractor firmly enough to account.”
After 132 years, Northamptonshire County Council ceased to exist on March 31 this year. Now he is working in Croydon, every day must be a Groundhog Day for McArdle.
Read more: Croydon Council handed biggest bail-out ever
Read more: £30m Fairfield Halls project never went to competitive tender
Read more: ‘Not good enough’ chair of scrutiny could yet stay in post
Read more: A level of ineptitude which would be tolerated nowhere else
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